The portfolio outlined on April 9th, 2009* remains the same. Due to recent price increases the margin of safety on several of the stocks has unfortunately been reduced. I think they are all still selling significantly below intrinsic value, though most are now above the prices that I'd like to pay.

Return for the six stocks combined is 8.5%** using average market prices available for each stock on April 9th, 2009. Of course, that return is meaningless considering the short time frame. The only implications are that it is now slightly more challenging to pick up more shares. I will recommend adding to positions if market provides buying opportunities for any of these stocks and adjust cost basis accordingly.

The good news is PEP is lower and PM has not done a whole lot.

I like owning these all six of these stocks if shares can be bought at a nice discount to intrinsic value.

The idea is to own these a decade or more from now. Over the next five years may add 1-2 stocks to the portfolio. This is focus investing not trading. Lots of homework with minimal trading activity. Rarely but occasionally I may switch one of the above "core six".

Hopefully at least some of the prices on these stocks will be going down in the coming months.

As I've said previously, I do not believe this portfolio will necessarily outperform the markets in the next 2-3 years. It will definitely under-perform if we get into another one of these bubbles. Having said that, I believe this portfolio will easily outperform the market over the next decade...and just as importantly...with minimal trading activity required and lower risk.

We've seen bubbles produce the appearance of increased wealth instead of durable wealth creation. Unlike the bubbles (Commodities, Emerging Markets, Housing, Technology to name a few) of recent years one crucial difference is that the above portfolio is not only likely to go up significantly...the companies should intrinsically be worth it and provide a more durable investment platform. In other words it won't just go up...it's likely to stay there. I try to avoid the "get out before it goes over a cliff!" style of investing.

Build a portfolio with shares of businesses that are so good you can almost ignore it.

Adam

Long position in DEO, AXP, PEP, PM, WFC, and LOW

* This site does not provide investing recommendations as that comes down to individual circumstances. Instead, it is for generalized informational, educational, and entertainment purposes. Visitors should always do their own research and consult, as needed, with a financial adviser that's familiar with the individual circumstances before making any investment decisions. Bottom line: The opinions found here are never a recommendation to buy or sell anything and should never be considered specific individualized investment advice.In general, intend to be long the positions noted unless they sell significantly above intrinsic value, core business economics become materially impaired, prospects turn out to have been misjudged, or opportunity costs become high.** As of 4/29/09.